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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2023-10-17 Daily Xml
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Bills

Hydrogen and Renewable Energy Bill

Adjourned debate on second reading.

(Continued from 28 September 2023.)

The Hon. N.D. CHAMPION (Taylor—Minister for Trade and Investment, Minister for Housing and Urban Development, Minister for Planning) (12:35): I rise to make some remarks about this bill. We all know that the reduction of reliance on fossil fuels is absolutely critical if we are to address the climate crisis. In this crisis South Australia has already embarked upon a really fundamental journey—from around 2006 when the Rann government passed the renewable energy act—in addressing that crisis and shifting from gas and brown coal at that time, a system totally dominated by fossil fuels, to a system now totally dominated by wind and solar with peaking plants being provided via gas.

We know that the next stage of resolving that crisis, of answering that crisis, of reducing our overall reliance on fossil fuels is, of course, hydrogen. That is the key way in which South Australia will not just decarbonise its own economy but also assist in the decarbonising of our trading partners' economies as well. We have a huge ability to contribute both in demonstrating how you can do this, in providing advice to other jurisdictions about how you might go down this path, and also, critically, as I said before, through the export of hydrogen or energy or green steel or green iron or green minerals.

All of that, I think, puts us in a very unique place, and one thing that we have to do is to tell that story not just once but over and over and over again. My department, in collaboration with other state government agencies, is very keen to provide that support. Invest SA is out there educating people about markets, most recently at the Hydrogen 2 conference in Washington, talking about South Australia's unique journey and about how we have built the bridge to a renewable energy economy, as we are literally walking across it, and pitching that story.

I think all too often South Australia's achievements are lost or obscured by Australia's journey in toto. Sometimes people are very focused on Queensland, New South Wales and Victoria, which are, of course, totally dominated by brown and black coal, totally dominated by a reliance on gas and totally reliant on an inadequate attention and vigour applied to renewable energy. We have a job in making sure that South Australia's unique position is acknowledged by the rest of the country.

Of course, the Hydrogen Jobs Plan, the Premier's signature election commitment, is now government policy, with $593 million to build a world-leading green hydrogen power station, electrolyser and storage facility at Whyalla in the Upper Spencer Gulf. Delivering on that plan will enable South Australia to continue the leading role, to continue being on the cutting edge of what is a global energy transformation. It is one of the key pillars in our economic strategy and our policy agenda over the next four years. It is about harnessing renewable energy to produce hydrogen and it is also about the opportunity for jobs, investment and business activity.

There is some $20 billion worth of investment in the pipeline around renewable energy. This has the potential to unlock vast areas of the state's economy. Of course, that investment activates the sorts of developments that we need to meet our investment and export targets and to support local mineral processing and energy. We know that around the world there is a huge amount of investor interest in hydrogen, especially green hydrogen sourced from renewable energy, as a substitute for fossil fuels.

On nearly every one of my trade missions, we found round tables of investors—whether it was in Singapore, Japan, South Korea, the US or in Europe and the United Kingdom. People are very interested because they have their own jurisdictions, their own challenges and their own issues. Wherever we go to talk to investors, they find South Australia's experience over the last 20 years to be very instructive, they find the resource that we have in terms of wind, solar and also critical minerals to be truly unique and they find that the next steps that we are taking to also be instructive.

This act is designed to regulate the whole life cycle of hydrogen and renewable energy projects and, critically, provide a single window to government approach. So what is new? We have a pre-competitive identification for priority areas on Crown land and that determines, basically, where we can sustainably host renewable energy projects and where project proponents will compete for licences and for land tenure. We are going to have an orderly process on Crown land. We are not going to have the dust of a hundred wagons as people have a goldrush mentality; we are going to have an orderly process that is in the interests of the state.

We are going to have a competitive allocation of licences to proponents on Crown land. Applicants, subject to a transparent selection criteria, will compete for licences on Crown land—which are mainly pastoral leases—and on state waters. As I said before, that makes sure that it protects the interests of the state. It also ensures that we host only those projects willing to embrace coexistence with current land uses and deliver community and environmental benefits through those projects.

We are going to have new licensing arrangements and impact assessments for projects across all land types. That enables regulation for the whole of the project life cycle, avoids land-banking activities, or where projects are sitting around indefinitely waiting for investment, and facilitates the capture of resource data on Crown land, freehold land and state waters—a really critical element to having a coherent response, and that is why this is in part such a critical piece of legislation.

We are also going to have environmentally sustainable development, a framework that places development in the context of ecologically sustainable practices and the circular economy, which we know that we have to embrace not just because it is more climate friendly but also because it is much more efficient. It creates economic incentives, which we have already seen in waste collection and the like, and it makes better use of finite resources.

We are going to have well-resourced and effective regulation, full cost recovery for government services through licence fees and charges, with fit-for-purpose compliance and enforcement powers. That is one of those things that rolls off the tongue pretty easily, but cost recovery for government services is actually critical in providing the private sector with fast and efficient government.

All too often you hear people complain about government, business often complain about government, but all too often that is because cost recovery is not applied as a measure. If you have cost recovery applied as measure, then you can employ the public servants who are necessary to complete these approvals in a rigorous, sensible and efficient manner. If you want efficient government, you do have to have cost recovery. In the same way as if you were running a business—you do not run at a loss—government has to account for the cost of providing these regulatory services.

We want to have land protection and restoration. We want to have financial assurance requirements to ensure that land is rehabilitated and returned to pre-existing conditions. That is really critical. As the Minister for Housing and Urban Development, having Renewal SA in my portfolio, Renewal SA looks after a lot of land that has been very heavily polluted from industrial activities, sometimes dating back as far as the 1900s. Brompton Gasworks is one of the most prominent examples, but there are a whole range of other industrial activities, industrial land that we hold, in the north in particular, where there are remediation issues which have to be accounted for and were not factored in when those industrial developments were contemplated in the first instance.

Often you talk to car workers who are now retired, or workers who had been in the plastics industry or what we would regard as heavy manufacturing now, who will tell you about some of the practices that went on—tipping chemicals into drains, effluent going out into local creeks and the like—which often had pretty dramatic effects on the local environment. Remediation falls back ultimately, nearly always, on the state, if it was not accounted for in the first instance. Making sure at the outset that the remediation of land is thought about, contemplated and costed is just so critically important.

As to pursuing multiple land use outcomes, obviously there are existing communities and people have existing land rights. There are landowners, and those people who are already out there on Crown land do need to be accommodated. Their interests do need to be thought through while we avail ourselves of what is a magnificent solar and wind resource.

Finally, and perhaps most critically, we want to drive benefit for the entire state. We need a financial mechanism to share the future benefit of the value associated with the access of the state's natural resources. The solar and wind resource, which has been mapped by the department of my colleague Minister Koutsantonis, is quite rightly a resource held by the state, and the benefit from that needs to come back to the state as well.

There has been a really comprehensive consultation process. That is important when we are thinking about this sort of legislation; we do need to consult. A comprehensive issues paper was released in late 2022 and a draft bill in May 2023. The government received nearly 200 submissions throughout that consultation. Of course, from the inception, the advice of our First Nations people was sought on the design of these reforms. The state hosted two South Australian Aboriginal Renewable Energy Forums in Port Augusta, one in November 2022 and the other in March 2023, to understand the issues and challenges impacting on Aboriginal groups and to discuss the opportunities to work together on the development of renewable energy.

There has been a regional visit, a dedicated workshop and an online webinar, which has been delivered to the pastoral community to support quality engagement with the government on the draft bill. A total of 18 information sessions were conducted across South Australia's regions during that consultation, and two online webinars—because everything is online these days—were held and recorded with over 200 recorded attendees and a further 300 views on the recordings post that. There were dozens of meetings held with key stakeholder groups and individuals, providing an opportunity to hear directly about the proposal and ask any questions of the government.

Of course, that is not the end of these conversations. The government will continue to work with stakeholders and rights holders to develop the associated regulations and to move forward in identifying the very first release areas for competitive tender under this framework. That is important because we know that sometimes in the community consultation is met with a degree of cynicism, but, in fact, if you look at the way consultation operates with government it is taken seriously.

The more you do of it, you do see the changes to bills and to the way things are developed. Most importantly, it is just inherent in projects like this—which will span over governments and over generations of politicians—that consultation is an absolutely critical part because the following generations of ministers and politicians will look to the work we did in the establishment of this bill, in the same way that we look back at very far-sighted and courageous actions of the Rann government that really saw what the future held and tried to embrace it rather than resist it.

I can tell you that I saw a different approach happen at the commonwealth level, which is now talked about as a climate war. Having been a participant in that, most notably I remember Alan Finkel did a very substantial report that was then released and, rather than seeing sensible and thoughtful consideration of it, what we found was that there was one party room meeting in the Turnbull government and it died an early death. It was actually a very good report about Australia's energy system which I commend to members. I remember thinking how incoherent an approach we were taking at a federal level and that, whatever your politics, it was just not the way you should go about things.

Members on each side of the chamber often have a lot of ability through consultation, through expertise, through parliamentary committees—and ministers through their ability to undertake these consultations and do these regulations—to learn a lot by listening to people. You do not always agree with them, but you often learn something that you later incorporate into regulations and the like. Of course, that means that there are review provisions. There is a review locked into this act, so there is a review five years after the commencement and then every five years thereafter. You can see with consultations that it is not 'set and forget'. This is an approach undertaken by the government that is all about continual learning and refinement in this act that I think is absolutely critical to this government's approach.

This project is just the beginning of our ambitions for South Australia as a world leader in the hydrogen economy. We are really eager to develop mutually beneficial international relationships around hydrogen. As I said before, the Premier, Minister Koutsantonis and I went to Japan and South Korea. I have been back to Japan for the Fuel Cell Expo, I have been to Singapore and the Premier and Minister Koutsantonis went to Germany and to Rotterdam. We have now established an office in Europe, in Germany, based around the hydrogen economy, and we want to make sure that we engage with the rest of the world on this really important issue.

Most recently, I attended the Australia-Japan business conference in Melbourne (AJBCC), and really the interest in hydrogen and renewable energy in that pathway in Australia's journey—and in the mutual interdependence of Australia's and Japan's economies—is still there. There is a lot of interest there. As I said before, my department was represented at H2 in Washington, and I think there will be just a relentless drumbeat around renewable energy and hydrogen.

Finally, I would certainly like to thank my colleague Minister Koutsantonis. As part of this bill, I have ceded some of the planning responsibilities I have to his department. I think that is a sensible and coherent thing to do—to have one window to government and one regulatory minister. I think this will be an act that will be celebrated by other jurisdictions and copied, inevitably, and I commend it to the house.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (12:56): I thank all members for their participation in this debate. It is a historic bill. I do want to thank my friend and colleague the Minister for Planning for his cooperation in this matter. It is been a long, long journey to this point.

We are about to enter into a very long, I imagine, committee stage of this bill. There will be a number of questions from members on both sides about this bill. This bill is historic. It is unique in the commonwealth, as it is a one window to government for all renewable developments in South Australia on freehold, pastoral and Crown land, which is unique. The reason we do so, the reason we have these ambitions, is that it is South Australia's time to re-industrialise on the back of renewable energy.

The critics of renewable energy believe that renewable energy has been the cause of deindustrialisation. I believe that they are wrong. I believe that we can harness the sun and the wind, and our other renewable resources, and that we can use our vast amounts of land and our coincident sun and wind to beneficiate what God has given us in vast amounts of magnetite reserves across the nation, especially here in South Australia.

Our magnetite is unique. Our magnetite is possibly the best anywhere in the world. I pose this question to members of the house: would it be easier for us to export hydrogen to markets around the globe, or would it be easier for us to decarbonise manufactured goods here and export them traditionally? I am talking about green iron or green steel. I think the answer is obvious. With those few words and the—

Mr Odenwalder: New information has come to light.

The Hon. A. KOUTSANTONIS: With those few words, I will continue my remarks for another moment or so.

This bill was not an election commitment that we made. This bill came about—and I mean this not as a criticism of the former minister—because as energy minister I was meeting with proponent after proponent who was meeting with pastoral leaseholders, signing individual agreements for vast tracts of South Australian Crown land from the pastoral lease for renewable projects which had no time line and no work plans. They were basically locking up vast parts of South Australia to suit their own timetables and not ours.

What we are proposing are timetables, much like an oil and gas tenement or a mining tenement, where we want to see work plans up-front, we want to see spending plans up-front, we want to regulate and monitor how they are being performed, and I think that will give us more development faster. With that, we could see gigawatt scale behind the mineral renewable resources built that could be used to split water to make hydrogen, to make ammonia, to make toluene, to make forms of energy that we can use here or export, which could dramatically alter the landscape of South Australia. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 13:00 to 14:00.

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